Question

How does the 'law of large numbers' relate to the predictability of results in insurance?

a.

It makes the results less predictable as the sample size grows.

b.

It ensures that results are always exactly as predicted.

c.

It states that larger sample sizes lead to more predictable results.

d.

It only applies to policies with small sample sizes.

Posted under IC38 Life Insurance Agent Exam

Answer: (c).It states that larger sample sizes lead to more predictable results. Explanation:The 'law of large numbers' states that larger sample sizes in insurance lead to more predictable results.

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Q. How does the 'law of large numbers' relate to the predictability of results in insurance?
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